Commissioner Of Income Tax v. Sh. Baldev Raj Mehra

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. I.T.A. No.612 of 2008 Date of decision: 15.2.2011 Commissioner of Income Tax Vs. Sh. Baldev Raj Mehra. -----Appellant. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOELHON'BLE MR. JUSTICE AJAY KUMAR MITTALHON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:-Mr. Sukant Gupta, Standing Counselfor the appellant for the appellant Ms. Radhika Suri, Advocatefor the respondent. --- ADARSH KUMAR GOEL, J. This appeal has been preferred by the revenue underSection 260-A of the Income Tax Act, 1961 (for short, “the Act”)against the order of the Income Tax Appellate Tribunal, Amritsardated 16.11.2007 in I.T.(SS)A. No.14(ASR)/2003 (Block periodfrom 1.4.1989 to 22.7.1999) raising following substantialquestions of law:- “(i)Whether the Hon’ble Tribunal has erred inconcluding that since the photocopy of the letterhad been made available to the counsel for theassessee and not to the assessee, the same alsodid not amount to grant of reasonable opportunity?concluding that since the photocopy of the letterhad been made available to the counsel for theassessee and not to the assessee, the same alsodid not amount to grant of reasonable opportunity? (ii)Whether the Hon’ble ITAT even while concludingso has lost sight of the fact that the counsel wasduly representing the assessee in the proceedingsand had also replied to the said letter on the behalfof the assessee, thus the assessee had exercisedhis right of hearing before enhancement of incomeassessed?so has lost sight of the fact that the counsel wasduly representing the assessee in the proceedingsand had also replied to the said letter on the behalfof the assessee, thus the assessee had exercisedhis right of hearing before enhancement of incomeassessed? (iii)Whether there was any violation of the principle ofthe natural justice or there was procedural error asprovided for u/s 251(2) of the I.T. Act?the natural justice or there was procedural error asprovided for u/s 251(2) of the I.T. Act? (iv)Whether, even while holding that properopportunity before enhancement was not given,the Ld. ITAT was justified in quashing theenhanced addition to assessed income instead ofrestoring the matter to the file of CIT(A) to grant aproper opportunity before enhancement?”opportunity before enhancement was not given,the Ld. ITAT was justified in quashing theenhanced addition to assessed income instead ofrestoring the matter to the file of CIT(A) to grant aproper opportunity before enhancement?” Return of the assessee for the block period inquestion was processed under Section 143(1)(a) of the Act butlater, assessment was made under Section 143(3) of the Actwhich was upheld by the CIT(A) and further addition was made.The addition by the CIT(A) was set aside by the Tribunal on theground that procedure under Section 251(2) was not followedbefore making further addition. The Tribunal dismissed the crossappeal of the assessee challenging the assessment itself on theground that notice under Section 143(2) of the Act had not beenserved within the stipulated period before the block assessment.Against the order of the Tribunal, the assessee preferred I.T.A.No.372 of 2009 before this Court which was allowed vide judgment dated 7.4.2010 following the judgment of the Hon’bleSupreme Court in Asstt. Commissioner of Income Tax andanotherv. M/s Hotel Blue Moon(2010) 321 ITR 362. It washeld that since statutory notice under Section 143(2) had notbeen issued within the stipulated time, assessment itself wasliable to be set aside. In view of the fact that assessment itself has been held to be illegal, appeal of the revenue challenging setting asideof further addition by the CIT(A) has been rendered infructuousand is accordingly dismissed. (ADARSH KUMAR GOEL) JUDGE February 15, 2011ashwani ( AJAY KUMAR MITTAL ) JUDGE